:check: Chapter 2: National income accounting (Households & firms…
Chapter 2: National income accounting
National income and product accounts
Various components of national income and output
Compiled by ministry of finance
Gross-Domestic Product (GDP)
Total market value of all final goods and services
produced within a country
by factors of production
within a given period.
Produced within a country
In a given time period
Final goods and services
Produced for final use
Use in further processing
Difference between the value of goods as they leave a stage if production.
(Eg. From apple to apple juice)
Measure the value of production, which also equals
total expendinture on final goods and total income
In calculating GDP. Take the value of final sales
Exclusion of Used goods and Paper transaction
Second had GDP.
Old output is not counted in current GDP.
Financial transaction GDP
does not count
Gross National Profit
Total market value of final goods and services produced within a given period by factors of production owned by a
country's citizens, regardless of where the output is produced
Households & firms
use of capital &
use of land
C=Consumption of household. I=Investment for firms
Financial transfers are not part of the circular flow of expenditure and income.
Rest of the world